COMMISSIONER OF INCOME-TAX, KERALA vs K. B. KALIKUTTY AND ANR.

The Supreme Court held that the sale of assets for the purpose of closing down a business is taxable under the second proviso to Section 10(2)(vii) of the Income Tax Act, 1922, as amended by Act 67 of 1949. The Court clarified that the critical words inserted by the amendment indicate that sales made after cessation of business are still subject to tax. The High Court's ruling that the sale was not assessable was overturned, affirming that the sale proceeds are liable to tax regardless of the business's operational status at the time of sale.